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Cut IT Costs by Optimizing Software Licenses

Author: David Boyle | | December 15, 2022


 

With most companies running tens and even hundreds of databases, applications, and tools, it’s difficult to keep an IT department running lean. With the world facing a recession after a very shaky several years, managing costs to prepare for what’s ahead is a high priority for many organizations.

 
So where is a good place to start? You might find that you have a lot of potential for savings when it comes to managing software licenses and permissions. Let’s look at how this quick-win strategy can deliver big results.

What is License Optimization?

Software license optimization is a technique that is key to Software Asset Management. To commission and use databases, applications, and tools, companies must purchase licenses for each user. These licenses can come in different levels with a variety of features and security access protocols, and each comes with its own price tag to match.

If IT leadership isn’t careful and consistent, it can be easy for licenses to get away from them. When licenses are underutilized, issued too often, or fail to be decommissioned when an employee leaves, it leads to waste to the tune of hundreds and thousands of dollars. License optimization ensures that licenses are only granted to those who need them, with the right level of access and features, and are reassigned or decommissioned when they are no longer needed.

How to Optimize Software Licenses

To begin optimizing your software licenses, scour your technologies for unused or under-used licenses and decommission them. Check usage and consumption data to ensure that the licenses you’ve purchased are truly needed by the employees that have them. Remove and redeploy existing licenses when new users come on board, rather than purchasing new ones, when possible.

Here are four additional procedures we recommend implementing to lower licensing costs:

  1. Run regular audits to determine how often users are accessing tools and applications. Are there users that don’t really need their licenses? Can they get the information they need without full access or by asking another user to pull it for them?
  2. Review the types of licenses each user holds. Most licenses come in several flavors with varying access levels. If your audit shows that some users aren’t using all the features of their license, move them to a lower-cost or free version.
  3. Negotiate the licenses available in your contract. If your contract is up for renewal, use it as an opportunity to work more licenses into the deal. Your software vendor wants to keep your business so this is the time to ask for what you need so you can free up budget for other initiatives.
  4. Audit software usage, as a whole. It’s not uncommon for departments to buy a piece of software, discontinue using it, and forget to cancel the contract or service. This is a huge black hole of wasted budget. Stay on top of who is using what and cancel those subscriptions before they renew.

Cost Benefits of Optimizing Software Licenses

According to Gartner, recycling software licenses is one of three key software license optimization practices that can deliver savings of up to 30%. That’s no small amount of cash for companies running six or seven-figure systems. Staying on top of licenses will also ensure that you are in compliance with your contract; it’s increasingly common for software companies to conduct audits against their clients’ contracts and deliver penalties or retroactive fees for misuse.

In addition, license optimization provides security benefits. Employees who have left your company should never continue to have access to software applications they previously used. Failing to cancel their licenses could result in fines if you get audited.

Final Thoughts

When delivering managed services for our customers, our teams at Datavail execute license optimization practices to ensure our clients aren’t overspending on software assets. Our clients typically achieve a cost savings of at least 10% with this service and gain long-term benefits by adopting best practices to ensure licenses remain lean.

But this is only one way we help our clients save money and run efficient IT. To learn the other seven ways you can cut costs for your department, download our white paper, Declining Revenues? 8 Ways Datavail Helps You Save on IT Costs.

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